Typically the stock market operates in a left-foot, right-foot fashion. The stocks with the greatest potential for earnings gains moving forward, followed by a period of catch-up by the laggards. The latter is necessary for the former to make another step forward.

In the present case, the left foot is techy firms with global reach, the right is foot business cycle-sensitive, domestically oriented companies. The issue with the latter seems to me to be due to Trump continuing to urge his supporters to ignore medical protocols aimed at containing the coronavirus. The reason is arguably less important than the numbers. We know that both the EU and the US peaked at around 30,000 cases/day in late March. The EU is now around 4,000 and falling, while the US troughed at 20,000 or so and is now at 30,000+ and rising.

Until this situation changes, or until enough time passes, it looks to me like we’re stuck in neutral.

Nicholas Kristof wrote an opinion piece in the New York Times over the weekend. In it he says that in China people joke that Trump’s first name is really Build-The-Country, an early-Maoist choice to indicate the bearer’s patriotic fervor. This reinforces my impression that the rest of the world has a much clearer picture than we do at home of the damage being done to the nation by Trump’s ineptitude and his increasingly erratic behavior.